• Skip to primary navigation
  • Skip to content
  • Skip to primary sidebar

McCarter & English Logo

  • People
  • Services
  • Insights
  • Our Firm
    • Leadership Team
    • Social Justice
    • Diversity, Equity & Inclusion
    • Pro Bono
    • Client Service Values
    • Alumni
  • Join Us
    • Lawyers
    • Summer Associates
    • Patent Professionals
    • Professional Staff
    • Job Openings
  • Locations
    • Boston
    • Philadelphia
    • East Brunswick
    • Indianapolis
    • Stamford
    • Hartford
    • Trenton
    • Miami
    • Washington, DC
    • New York
    • Wilmington
    • Newark
  • Share

Share

Browse Alphabetically:

  • A
  • B
  • C
  • D
  • E
  • F
  • G
  • H
  • I
  • J
  • K
  • L
  • M
  • N
  • O
  • P
  • Q
  • R
  • S
  • T
  • U
  • V
  • W
  • X
  • Y
  • Z
  • All
Bankruptcy, Restructuring & Litigation
Blockchain, Smart Contracts & Digital Currencies
Business Litigation
Cannabis
Coronavirus Resource Center
Corporate
Crisis Management
Cybersecurity & Data Privacy
Delaware Corporate, LLC & Partnership Law
Design, Fashion & Luxury
E-Discovery & Records Management
Energy & Utilities
Environment & Energy
Financial Institutions
Food & Beverage
Government Affairs
Government Contracts & Global Trade
Government Investigations & White Collar Defense
Healthcare
Hospitality
Immigration
Impact Investing
Insurance Recovery, Litigation & Counseling
Intellectual Property
Labor & Employment
Life Sciences
Manufacturing
Products Liability, Mass Torts & Consumer Class Actions
Public Finance
Real Estate
Renewable Energy
Sports & Entertainment
Tax & Employee Benefits
Technology Transactions
Transportation, Logistics & Supply Chain Management
Trusts, Estates & Private Clients
Venture Capital & Emerging Growth Companies
  • Broadcasts
  • Events
  • News
  • Publications
  • View All Insights
Search By:
Insights Publication Magazine Open Stack
Main image for New Jersey Biotechnology Task Force Recommends Angel Investor Tax Credit Program Expansion
Publications|Alert

New Jersey Biotechnology Task Force Recommends Angel Investor Tax Credit Program Expansion

8.10.2018

Good news for investors and entrepreneurs: The New Jersey Biotechnology Task Force (Task Force)[1] has published its final report and recommendations to expand the Angel Investor Tax Credit Program with the goal of incentivizing companies in the life sciences industry to either remain in or relocate to the state. These recommendations, if adopted, may also help certain New Jersey corporate investors that earn more than $1 million in income to offset the tax rate increase enacted with the recent passage of the state budget. The Task Force’s underlying rationales apply with equal force to tech and tech-enabled companies.

Currently, the Angel Investor Tax Credit Program, jointly administered by the New Jersey Economic Development Authority (NJEDA) and the New Jersey Division of Taxation, provides refundable tax credits against New Jersey corporation business and personal income tax liability for qualified investments in an emerging technology business with a physical presence in New Jersey that conducts research, manufacturing, or technology commercialization. (See the eligibility requirements for the program here.) The credit is currently worth 10% of a qualified investment with a cap of $500,000, but the Task Force has called for it to be increased to 25% with a cap of $500,000. Under the proposed expanded credit, for example, a corporate or individual investor could write off $500,000 from its state income tax bill as a consequence of making a $2 million qualified investment. This is a powerful incentive with both immediate and long-term benefits: investors enjoy immediate tax savings and increased ROI, companies enjoy increased access to capital, and the state becomes more attractive to technology, tech-enabled and life sciences enterprises.

The Task Force also recommends the relaxation of the employment requirement. Currently, investments qualify only if they are made in a company in which 75% of employees are qualified New Jersey employees. As the Task Force noted, however, “[i]t is common for young companies to not put their employees on payroll until just after the first funding round occurs.” Accordingly, the Task Force called for changes that would allow the NJEDA to measure employment up to 30 days post-investment.

Though the expansion of the angel tax credit program has not yet been introduced in the legislature, now is the time for supporters of the credit to show their backing for the expansion.


[1] The nonpartisan Task Force was created to improve communication between New Jersey state government and the biotechnology industry. It is comprised of six legislative members; two public members, including Debbie Hart, President and CEO of BioNJ, and Daniel O’Connor, Chief Executive Officer of OncoSec Medical Incorporated; and Timothy Lizura, President and Chief Executive Officer of the New Jersey Economic Development Authority, serving in an ex-officio capacity.

sidebar

pdfemail

Related People

Media item: Omar A. Bareentto
Omar A. Bareentto

Associate

Media item: Michael A. Guariglia
Michael A. Guariglia

Partner

Related Services

Venture Capital & Emerging Growth Companies
Tax & Employee Benefits
Government Affairs
Corporate
Subscribe to our Insights
McCarter & English, LLP
Copyright © 2023 McCarter & English, LLP. All Rights Reserved.
  • Login
  • Attorney Advertising
  • Privacy
  • Awards Methodology
  • Contact
  • Subscribe
  • Sitemap

The McCarter & English, LLP website is for informational purposes only. We do not provide legal advice on this website. We can provide legal advice only to our clients in specific inquiries that they address to us. If you are interested in becoming a client, please contact us, but do not send any information about your specific legal question. We cannot serve as your lawyers until we establish an attorney-client relationship, which can occur only after we follow procedures within our firm and after we agree to the terms of the representation.

Accept Cancel